Rules to Stop China Buying Sophisticated US Tech Must Move Faster: Lawmaker

October 30, 2019 Updated: October 30, 2019

WASHINGTON—A Republican lawmaker has expressed “deep concern” that the U.S. government has been slow to roll out rules to stop American companies from selling their most sophisticated technology to China.

“While our regulatory process moves slowly, China is sprinting ahead to acquire critical technology by any means necessary,” U.S. Representative Michael McCaul, ranking member of the House Foreign Affairs committee, said in a letter to Secretary of Commerce Wilbur Ross, obtained by Reuters and dated Oct. 18.

The letter seeks an update and timeline on rules, mandated by a law passed last year, to beef up oversight of exports of critical U.S. technologies. The regulations are meant to quell purported risks to national security amid a rising threat from China.

“How does the U.S. government ensure engagement by the U.S. private sector with China‘s high-tech sector does not lead to a U.S. company supporting Chinese efforts to acquire cutting edge technology for China‘s armed forces?” he asked.

The law mandating the rules, known as ECRA, sought to make it harder to export key technologies to adversaries like China as part of a bid to maintain an American innovation edge for economic and security reasons.

It mandated that the Commerce department draft new rules to tighten controls of sales of emerging or cutting edge technologies and so-called foundational technologies, those seen as essential making key items like semiconductors.

While the agency sought public comment in November on how to draft its emerging technology rules, it has yet to issue any proposed or finalized measures. Commerce has not yet sought industry input on how to design its foundational rule-making.

Commerce did not immediately respond to a request for comment. On Oct. 29, Commerce official Eileen Albanese said the agency would propose emerging technology rules “shortly” and that the agency hoped to seek comment before proposing a rule for foundational technology before the end of the year.

She also cautioned against being “shortsighted” and writing rules that are so tough that they cut off the revenue flows from foreign customers that allow U.S. firms to stay at the forefront of technology.

By Alexandra Alper

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